Lloyds says António Horta-Osório has 'no case to answer'

Lloyds Banking Group has told its 75,000 staff that the chief executive has “no case to answer” over questions he may have breached the bank’s expenses policy.

The bank, 9% owned by the taxpayer, issued the memo after The Sun raised the questions about António Horta-Osório’s expenses in a story about a business trip to Singapore where he was photographed with a female companion.

The memo said: “Following the Sun’s story, the group undertook a review to ensure there was compliance with the group’s expenses policy. In this regard, the review found there were no breaches of the group’s policy and there was no case to answer.”

Last month, the Portuguese-born banker announced 3,000 job cuts – on top of 54,000 since the rescue of HBOS in 2008 – and 200 branch closures.

The bank said any personal expenses had to be met by staff. “On the issue of expenses, our policy is very clear: the group will meet any legitimate business expenses incurred by our staff,” it said.

“Personal expenses will be met by the individual. In practice, the individual executive will pay all expenses incurred – personal and business – and then reclaim the business expenses from the bank.”

It said the bank had been “returned to financial health” in the past five years.

Lloyds’ shares were broadly flat at 55p on Wednesday. The average price at which taxpayers bought a 43% stake in Lloyds at the height of the crisis was 73.6p.

While the taxpayer stake has fallen to 9% through a series of a share sales, it seems unlikely that the Treasury will press on with George Osborne’s promised offering of shares to the public at discount while the share price remains below the average price paid for the shares.

The views of Philip Hammond, Osborne’s successor as chancellor, on what to do with the remaining stake have not yet been made public.